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Summary
- Oil and gas stocks of Suncor Energy (TSX:SU) and Canadian Natural Resources Ltd (TSX:CNQ) jumped significantly in November following Pfizer and Moderna’s news of successful COVID-19 vaccine trials.
- The S&P/TSX Capped Energy index is up 27.1 per cent this month and 25.09 per cent quarter to date.
- Suncor Energy recently announced a quarterly dividend of C$ 0.21
- Canadian Natural Resources will be paying a quarterly dividend of C$ 0.425 on 5 January 2021.
Stocks of Suncor Energy (TSX:SU) and Canadian Natural Resources Ltd (TSX:CNQ) surged significantly in November after pharmaceutical companies Pfizer and Moderna announced successful results of their respective COVID-19 vaccine candidates in latest trials.
Canada, the fourth largest fossil fuel producer in the world, saw its oil and gas manufacturers suffer severely amid the coronavirus pandemic this year, reflecting in the 44.25 per cent year-to-date decline in the S&P/TSX Capped Energy index. But as the news of a potential COVID-19 vaccine emerged, investors shifted their attention to riskier stocks. As a result, oil and gas stocks such as Suncor Energy and Canadian Natural Resources recorded a huge jump in their trading volumes.
The S&P/TSX Capped Energy index also noted a growth of 27.1 per cent this month and that of 25.09 per cent quarter-to-date.
In the light of the recent spike in their stock prices, let’s delve into the profiles of energy companies Suncor Energy and Canadian Natural Resources.
Suncor Energy Inc (TSX:SU)
Current Stock Price: C$ 20.14
Suncor Energy announced its quarterly dividend of C$ 0.21 on Wednesday, November 18, which will be payable on December 24. The stock currently records a dividend yield of 4.17 per cent, as per the TMX Group data.
Stocks of this Canadian energy company has been soaring since November 9, when the news of Pfizer’s vaccine efficacy broke. The scrips continue to rally on the Toronto Stock Exchange (TSX), with an average share movement volume of 13 million in the last 10 days and that of 9.4 million in the last 50 days.
Suncor Energy’s YTD price chart (Source: EODHD/Others, Thomson Reuters)
Suncor stocks are down about 53 per cent this year. Since plunging during the pandemic-triggered March lows, its scrips dwindled nearly 16 per cent in the last six months and almost eight per cent in the last three months.
The COVID-19 vaccine news this month, however, saw Suncor shares jump 34 per cent in November so far (month-to-date).
SUNCOR ENERGY INC Q3 2020 FINANCIAL RESULTS
Suncor Energy’s funds from operations stood at C$ 1.16 billion in its third quarter ending 30 September 2020. While this number was noticeably up from that of C$ 488 million in Q2 2020, it registered a YoY drop from C$ 2.6 billion in Q3 2019.
The energy company recorded a cash flow of C$ 1.24 billion from operating activities in Q3 2020, down from C$ 3.13 billion in Q3 2019.
Suncor Energy’s operating loss of C$ 302 million in the latest quarter was comparatively lower from that of C$ 1.48 billion in Q2 2020.
The Calgary-based company resorted to several cost control measures to reduce its operating and capital costs in the wake of the coronavirus pandemic. In October, Suncor Energy released a statement saying that it plans to cut down its workforce by up to 15 per cent.
The company said in its latest quarter report that it is “on track” to meet its operating cost reduction mark of C$ 1 billion and capital cost reduction target of C$ 1.9 billion.
Canadian Natural Resources Ltd (TSX:CNQ)
Current Stock Price: C$ 7.26
Stocks of Canadian Natural Resources are currently trending high on the TSX platform, having accumulated an average share trading volume of 7.8 million in the last 10 days and that of 5.7 million in the past month.
Canadian Natural Resources’ YTD price chart (Source: EODHD/Others, Thomson Reuters)
The scrips lost about 34 per cent in value this year but have recovered over 11 per cent in the last six months and about six per cent in the last three months.
Canadian Natural shares registered a sharp climb of nearly 31 per cent in since the Pfizer news on November 9.
The Calgary-based oil and gas company surpassed Suncor as Canada’s most valuable energy company earlier in October. It currently has a market cap of C$ 32.9 billion.
CANADIAN NATURAL RESOURCES Q3 2020 RESULTS
Canadian Natural Resources’ revenue of C$ 4.5 billion in the third quarter ending 30 September 2020 saw a notable drop from that of C$ 6.1 billion in Q3 2019. Its cash flow from operating activities amounted to C$ 2 billion in Q3 2020, down from C$ 2.5 billion in the same period last year.
As of September 2020, Canadian Natural Resources had cash and cash equivalents of C$ 175 million.
It also recently declared a quarterly dividend of C$ 0.425, payable on 5 January 2021. It currently has a dividend yield of 6.087 per cent, as per the data available on the TMX Group.
